Air India-Vistara merger on track, Singapore Airlines gets govt nod for FDI

The proposed merger of Vistara with Air India is on track, with Singapore Airlines announcing on August 30 that it has received clearance from the Indian government for Foreign Direct Investment (FDI).

As part of the merger, Singapore Airlines will be acquiring 25% stake in Air India. The deal, which is expected to be closed by 2024-end, will create one of the world's largest airline groups.

"The FDI approval, together with anti-trust and merger control clearances and approvals, as well as other governmental and regulatory approvals received to-date, represent a significant development towards the completion of the proposed merger," the airline said in the filing to the Singapore Stock Exchange.

The airline also said the completion of the merger continues to be subject to compliance by the parties with applicable Indian laws, which is currently expected to be completed in the next few months.

The proposed amalgamation was announced in November 2022. Presently, Air India is owned by Tata Group and Vistara is a 51:49 joint venture between Tatas and Singapore Airlines.

According to Singapore Airlines, the parties are in discussions to extend the long stop date for the completion of the merger. Earlier, it was expected to be October 31, 2024.

Notably, the proposed merger was approved by the National Company Law Tribunal (NCLT) in June. Earlier, in March, Singapore's competition regulator CCCS gave a conditional nod for the proposed deal.

Prior to that in September 2023, the deal received approval from the Competition Commission of India (CCI), subject to certain conditions.

"SIA will make the necessary announcement(s) upon completion of the proposed merger or in the event that there are other significant developments," the filing said on Friday.